Of course, before you manage the payment processing at your end, you must have some means of collecting the money in the first place. Online credit card payment processing is one of the trickiest and most important payment processing issues for a mail order business. It is therefore this that we will tackle first here.
You could go with one of a number of well-known Payment Bureaux - as an alternative to high street banks - such as PayPal, Nochex, Protx, SECPay, Netbanx and Worldpay - a list of credit card processors and online providers which grows forever longer. Most of these Payment Bureaux do cost you more than going directly to a bank, and may require a merchant facility for them to transfer the funds into. Do check this out, and do check how long it takes funds to clear into your account. A Payment Bureau can also save you the trouble of setting up a website SSL (Secure Sockets Layer) payment processing system as all payments are typically processed through the Payment Bureau's own web servers.
Although for six years we had been using the Royal Bank of Scotland Streamline (Now WordlPay) back-end credit card processing facility, they do seem to have increased their set-up fee and monthly charges to such a degree that we can no longer advise new clients to go down this route. If however, you do choose to go down this route, then please refer to our section on WorldPay. It is a good service, but it really cannot be cost effective for a start-up. Another money spinner for the banks is that some banks are insisting that you have a separate merchant facility if you trade online - thus leading to them requiring you to have two merchant accounts if you already have a traditional mail order business.
Therefore, as an interim measure we would advise any start-up to use EBay's PayPal service until you can establish that is worthwhile to take on the financial commitment of a full blown merchant account. With PayPal you can transfer money directly into your ordinary account and it can be set up almost in minutes! The big advantage is that they only charge you for what you use - no monthly rental or fees of any kind - just a similar percentage to what the banks charge you normally - about 2.5% depending on throughput. Nochex are now offering terms which are similar to PayPal - no merchant account required, etc. We suggest you check out the websites of the various Payment Bureaux for their most up-to-date information. Also use the DTI Electronics Payment Tool for cost comparisons. We feel the banks must look to their laurels! However, please bear in mind that there are limitations attached to some of these Payment Bureaux. For example, some of them insist that the paying customer sign up for an account with them before processing their credit card details, after they have used them a certain number of times. Others only operate with UK customers, etc. Check them out thoroughly first and this includes PayPal. Some make their money by holding onto yours for several months so you might find yourself running into cash flow problems if you use them.
As this is an area which is becoming ever more competitive please do contact us if you have any doubts about how up-to-date is the information we have provided here.